VICTORIA — A special audit into the newly constructed cold storage facility operated by the Seychelles Trading Company Limited (STCL) has uncovered “serious weaknesses” in the project’s planning, management, and execution. Auditor General Gamini Herath presented the findings to the Minister for Finance, Economic Planning, Trade and Investment, Pierre Laporte, at State House yesterday morning.
The audit was initiated following a request from President Patrick Herminie under Article 158 of the Constitution, which mandates scrutiny of public funds. The investigation tracked the project from its early planning stages in 2021 through to its commissioning in 2025.
Findings on Planning and Groundwork
The facility was designed to replace deteriorating infrastructure in Victoria and improve the storage of perishable goods, including meat, fruits, and vegetables. However, the Auditor General revealed that the project lacked essential groundwork from its inception.
- Missing Analysis: Beyond a basic capacity planning exercise, there was no comprehensive project proposal, needs analysis, or cost-benefit assessment conducted by STCL.
- Contractor Selection: Serious concerns were raised regarding the selection of the main contractor, Sey Turk Limited. The company was awarded the contract through direct bidding without strong justification, raising issues of transparency and fairness.
- Due Diligence: There was no evidence that due diligence was performed to confirm the contractor’s technical or financial capacity. Records indicate that discussions with a representative of Sey Turk began before the company was even officially registered.
- Shareholding: The audit noted that Jean-Pierre Morin holds a 40 percent stake in Sey Turk Limited, with two other individuals each owning 30 percent.
Financial Losses and Contract Gaps
The project, initially approved at a cost of US $5.5 million, saw total payments escalate to over US $7.6 million, excluding VAT. This represents a cost overrun of approximately US $2.1 million, or 39 percent above the original contract sum.
- Contract Shortcomings: The agreement failed to clearly define the project scope, deliverables, timelines, penalties, or performance guarantees, leading to significant delays.
- Questionable Payments: The audit questioned several payments, including a “force majeure” claim exceeding US $500,000 for which there was no provision in the contract.
- Operational Failures: Since becoming functional, the facility has suffered further losses. Equipment issues resulted in the spoilage and disposal of more than 74 tonnes of onions, costing STCL R706,176.
Auditor General Herath concluded that these inconsistencies and management failures have resulted in direct monetary losses for STCL. The report and its findings are based on evidence collected throughout the audit process to establish clear facts for the government.
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